Consider a bond with a coupon rate of 14% and coupons paid semiannually. The par value is S1000 and the bond has 7 years to maturity. The yield to maturity is 16%. Required: Find present values based on the payment period How many coupon payments are there? What is the semiannual coupon payment? What is the semiannual yield?
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Consider a bond with a coupon rate of 14% and coupons paid semiannually. The par value is
S1000 and the bond has 7 years to maturity. The yield to maturity is 16%.
Required:
Find
How many coupon payments are there?
What is the semiannual coupon payment?
What is the semiannual yield?
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